Jem's Daily MACD Reversal Strategy

[Jemook]

Hi Jem - My chart doesn't look the same as yours - I think I may be missing some indicators. Also on my eurusd chart macd is red all the way... Thanks for sharing your new toy...

Hey rosst,

I haven't updated my screens to the latest template - so don't worry you aren't missing anything.

MACD signals will be a little bit different on all brokers. I'd say this is mostly to do with GMT time differences. Just take any signal you get because it's all going to average out in the end because so many trades happen.

[forex.rapheal]

Hi Jem,
Thank you for the strategy. It suits me well as I am a daily trader (trade once in the morning)
Can we have a multi daily Jem EA so we can forward test it? Also how do we add positions if there is a long run? That is the key to be sucessful and the return will be improved tremendously.
Regards,

[garyfritz]

Gary - the problem with throwing out the bad ones is that they'll probably perform well once I throw them out as the markets are always changing. For instance GBPJPY has 14 losses and 2 wins - but it made me the most pips. My point is I can never decide so I just trade them all and hope for the best.

That's why I said I'd only do that with consistent losers. Looking at the equity curve, if it's lost pretty consistently for the last 3-4 years, it's probably not going to turn around tomorrow. They might, but the odds are better if you ditch 'em.

[Jemook]

Hi Jem,
Thank you for the strategy. It suits me well as I am a daily trader (trade once in the morning)
Can we have a multi daily Jem EA so we can forward test it? Also how do we add positions if there is a long run? That is the key to be sucessful and the return will be improved tremendously.
Regards,

I was working on an EA with Steve but I don't want to put too much pressure on him to get it functioning correctly. I think MPTM does all the money management bits so all the EA really needs to do is:

1. Opens a long when MACD of PERIOD before changes colour from red to green
2. Opens a short when MACD of PERIOD before changes colour from red to green
3. Shut any position when MACD of PERIOD before changes colour.

variables:


- PERIOD (M1,M5,M15,H1,H4,D1 etc)
- PairsToTrade (input which pairs to execute trades on)
- Lot size

-------------------------
* I'm trying out Smeden's EA and it seems to be working fine.

* Adding positions is not part of this strategy but you're more than welcome to play around with a new variation

Gary - the problem with throwing out the bad ones is that they'll probably perform well once I throw them out as the markets are always changing. For instance GBPJPY has 14 losses and 2 wins - but it made me the most pips. My point is I can never decide so I just trade them all and hope for the best.

That's why I said I'd only do that with consistent losers. Looking at the equity curve, if it's lost pretty consistently for the last 3-4 years, it's probably not going to turn around tomorrow. They might, but the odds are better if you ditch 'em.

Let me know which ones suck for the past 3 years and I'll cull them no worries!

You could also try and find out which pairs 'trend the best'. By this I mean which pairs have long smooth runs downwards or upwards and change MACD colour the least.

[garyfritz]

The "long runs and change color the least" is important. If you switch as soon as the MACD turns, you'll get whipsawed a lot. I'm experimenting with a couple of variants to reduce the switches: enter when MACD has been up/down for the last N candles, or when the market has moved X pips since the MACD turned. Both look promising but I'm still hammering out bugs.

[smeden]

Yes it is good to use many pairs. What stop loss do you use on the different time frames?

We could make a backtest on Empty4(Know it is not 100% good) and combine them. But when the strategy is on bar closed and only got stop on loss; It should be ok.

[Zypip]

Hi Jem,

Nice one (again) !

Don't know if you noticed Phil's thread over on the automated system section (MACD STOCHASTIC FRACTAL MA5/25 DAILY EA), he is using a "fractal" filter and what he calls a "non-trendy zone" detection that could both be useful additions to your system. I know, the "not broken so don't fix it" thingy, but I am just trying to point out some potentially useful info which may make your creative mind tick and go "ahah" when reading it.

Wish you all the best, you deserve it.

Zyp

[thomasmore]

Hi Jem,
I applied your strategy to my favourite pair EURJPY. I attach a chart where i added a LWMA 100 as an extra visual aid, and an overlayed MACD H4. Both can help to better evaluate the trend direction. Three situations:
1. Do nothing: price oscillates around LWMA100 and both MACD's are flat.
2. Enter:Both MACD's turn green, price crosses LWMA100 up
3.Exit:price spiked away from LWMA100,MACD H4 went red, and you are several hundreds of pips in the green.
Hope this helps to avoid frequent 30 pip losses.

[glabbeek]

Hi Jem,

For your money management the risk should not exceed 2% to 3% of your equity. This is a proven value for traders with a capital up to about 50.000 US.

Further I think you should lose the 30 pip loss and go for a volatility based stop loss. 30 pips for the EURUSD is something completely different as for the EURJPY. If you find that 30 pips work for you at this current time, than simply calculate what ATR value equals that 30 pips and use the ATR from this day on.

[Lifesys]

Hi Jeremy
I have watched your significant contributions to this forum with interest.

Some time ago I developed an EA which trades H4 crossovers of CCI or RSI filtered by ADX & TMASlope or EMA. Trades profitably but so infrequently & slowly as not to be useful on a forum.
Over time I greatly expanded the old TMASlopeDisplay to a wide spectrum MultiIndicator.
It seemed logical to add your MACD concept so potential trades can be seen instantly & not have so many chart windows open at once - unmanageable to many.
I have attached the indy as it might be useful to others but added a "*" if the D1 MACD has changed color twice in last 3 D1 candles - indicating bounce.

Questions. How do you filter the bouncing pairs?
Your equity list looks great but it does not show all the failed trades required to get that list, which could be well in excess of the ones still running. This has been experience of many other similar efforts. [ EquityMillipede similar concept.]
Here are 2 recent D1 chart pairs, which could kill your account if all taken?

JemsMACD.jpg

Fairly straight forward to autotrade this if system keeps in black. Thanks